The Death of the Family Farm
Ed - E.G. Vallianatos, formerly of the EPA, declares in this article in the Dodge City Globe that all of the evils in modern agriculture fall soundly at the feet of Corporate farms. The Vicious Thump respectfully dissents:I'm sorry, but the former EPA analyst E. G. Vallianatos is only partially correct, however obviously passionate.
Vallianatos is ignorant about how Agribusiness achieved its current state and, although seeing a portion of the picture, is quite unaware of why they exist and why, in many cases, they are failing. Compounding the silliness, Vallianatos included BSE-Mad Cow disease in the article. Mad Cow disease is largely more fright than fact in the consumer's mind, and isn’t as perilous to our citizens as our declining biodiversity in farm animal genetics. If that were not bad enough, Vallianatos blames almost everything but the stain in Kofi Annan's shorts on agribusiness mis-management.
Although the article, Opening the door for disease by E.G. Vallianatos, casts a wide net, let's concentrate on what appears to be the central theme in the thesis of Vallianatos's allegations, or as close to a central theme as I could discover.
The Death of Family Farms
Many experts believe that giant Agribusiness and Corporate farming is killing the Family farm. Not so. The death tax is doing that. Death taxes, known as estate or inheritance taxes, have been wiping out family businesses, especially farms, since their inception.
When a business is a life’s work and has property/land as well as expensive equipment, it is in peril at the time of death of the property owner. At the property owner’s death the value of all of his property is assessed. If he doesn’t have enough life insurance to pay the estate taxes or his heirs enough cash to pay it, then the business property of a small business person or the land of a farmer will have to be sold. Without land, one doesn’t farm.
Who buys the land? Corporations, insurance companies, land speculators, and the wealthy purchase it. With luck the next generation of struggling farmers trying to get enough land to have a viable farm will have their land purchases paid off by the time they die. At that point, there are even fewer farmers left trying to buy land. Every time an heir has to buy back land and equipment from his parent’s estate sale he loses farm size.
Why? It is simply because the value of land and equipment is so high, and added to the yearly costs of high-dollar inputs like fuel and fertilizer, can be overwhelming. An heir might not have enough equity to swing the loan for that kind of re-purchase. He’s probably been working with dad all of his life and is now, at the age of thirty-five to forty-five, having to practically start all over again in approximately thirty years. This vicious circle keeps repeating itself, losing more independent farmers with each generation.
Who works the land? Many times non-farm corporations, insurance companies, land speculators, and the wealthy will rent it to farmers. The smaller farmer works much of the land for themselves as rented land or for large agribusiness corporations, which attempt to force the art of farming into the structure and principals of industry—with indifferent success.
Corporations don’t die. Therefore, they have no estate tax. Many large land-holding farming families have incorporated to help with the estate tax issue. Because they are able to pass on their farmland, equipment, and expertise to the next generation easier, they are growing, buying land when estate sales come up.
Do you want to stop the downward spiral in the number of family farms as well as other family businesses? Repeal estate taxes!
Now, as to why family farms fail? They are businesses. Like any other business they are subject to fail from the same things that takes down other businesses--not paying attention to changes in the industry. Every business has growth, maintanance, or stagnation. When maintenance tilts to stagnation and stagnation lingers too long, business death occurs. When growth is unsustainable it too implodes and a business dies. The same thing happens to family farms. Just because they are noticeable, interesting, and hit the sentimental button doesn't mean they shouldn't be treated like the businesses they are. However, farming is also an art as well as a science. When those who engage in it are lost, so also dies the art of it.
-Vicious Thump
